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Audentes Prices $75M IPO As Gene Therapy Eyes First U.S. Approval

As the possibility of the first ever gene therapy approval in the U.S. draws closer, more gene therapy players are entering the public markets. Today, it’s San Francisco’s Audentes Therapeutics, which aims to use gene therapy to treat a group of rare diseases.

Audentes sold 5 million shares at $15 apiece in its IPO last night, right in line with its $14 to $16 per share expectations. The $75 million raise will help Audentes fund clinical work it’s doing on rare diseases such as X-Linked myotubular myopathy, Crigler-Najjar Syndrome, and Pompe disease. Audentes will begin trading on the Nasdaq today under the symbol “BOLD,” a nod to its name, which is derived from the Latin term for “one who has courage or boldness.”

Gene therapy’s multi-decade roller-coaster ride has been well documented, in Xconomy and elsewhere. The promise of shuttling a long-term, if not permanent genetic fix into a patient with a one-time treatment has tantalized scientists for years. But even with many recent ups and downs and questions regarding how broadly gene therapies will be used, how much they’ll cost, and how long they’ll last, the field is as close as its ever been to impacting healthcare. Spark Therapeutics (NASDAQ: ONCE) is in the process of filing for approval of a gene therapy for a genetic form of blindness. If approved by the FDA, it would become the first ever marketed gene therapy in the U.S. A group of hemophilia gene therapies are in clinical testing, and the returns—both in hemophilia B and the more common hemophilia A—while early, are encouraging. Bluebird Bio’s (NASDAQ: BLUE) work in blood diseases like beta-thalassemia and sickle cell disease has also shown promise.

As all of this has been unfolding, gene therapy startups have been forming and trickling into the marketplace over the past few years. Bluebird, Spark, UniQure (NASDAQ: QURE), Dimension Therapeutics (NASDAQ: DMTX), RegenXBio (NASDAQ: RGNX), Voyager Therapeutics (NASDAQ: VYGR), Applied Genetic Technologies Corp. (NASDAQ: AGTC), AveXis (NASDAQ: AVXS) and others have all gone public since 2013. Some, like Avalanche Biotechnologies and Celladon, have had significant clinical failures. But the newer gene therapy delivery tools, or viral “vectors”—most commonly, adeno-associated viruses, or AAVs—have so far proved to be much safer than those used in the past, a key distinction since significant safety problems are what wasted away gene therapy investments at the turn of the century.

Now here comes Audentes, which, like a few other gene therapy companies such as Dimension, AveXis, and Voyager, has a license to some of the AAV vectors owned by RegenX and could owe milestone payments to the company if these treatments progress. (RegenX’s work comes from the labs of University of Pennsylvania gene therapy pioneer Jim Wilson). Audentes is entering the public markets without any human clinical data as of yet. Its three lead products, for Pompe (AT982), Crigler-Najjar (AT342), and X-Linked myotubular myopathy (AT132), are expected to produce preliminary data from their first trials in the second half of next year. Audentes holds worldwide rights to all of them.

Each of these diseases is rare; X-Linked myotubular myopathy, for instance, affects about 1 in 50,000 newborn males worldwide, according to the National Institutes of Health. Pompe affects about 1 in 40,000 people, and Crigler-Najjar is diagnosed in 1 in 1 million newborns. There are treatments available for Pompe, so-called enzyme-replacement therapies that require frequent infusions, but Audentes’s pitch is the potential convenience of a single, long-lasting treatment with AT982. Nothing is available for X-Linked myotubular myopathy, a devastating muscle disease that often kills patients diagnosed with it by early childhood. People with one form of Crigler-Najjar, type 1, have to undergo hours of phototherapy every day to lower the dangerous levels of bilirubin in their bloodstream. But the effect of phototherapy wanes as patients get older, meaning a liver transplant might be required. Patients with type 2 Crigler-Najjar, by comparison, respond to the seizure drug phenobarbital.

Audentes has raised $135.8 million in equity financing since its 2012 inception, and had $80.3 million in cash as of the end of March. OrbiMed Advisors is by far Audentes’s largest shareholder with a 29.8 percent stake before the IPO. Others include 5AM Ventures (14.5 percent), Versant Ventures (11.1 percent), Sofinnova Venture Partners (7.8 percent), and Deerfield Management (6.3 percent). The company is led by president and CEO Matthew Patterson, who has had stints at a variety of rare disease companies such as Genzyme, BioMarin Pharmaceutical (NASDAQ: BMRN), and Amicus Therapeutics (NASDAQ: FOLD).